RECOVERY DERAILED YET AGAIN

RECOVERY DERAILED YET AGAIN

WORLD MARKETS                             

US indices, after opening with deep cuts of nearly a percent, recovered through the session to end with cuts of 0.2%-0.3% as investors found some relief from a slight recovery in bonds.

The benchmark 10-year Treasury bond yield traded near 2.26% after touching a 6-month high of 2.366%. The 30-year bond yield held near 3.02% after reaching a 6-month high of 3.06%.

Nymex oil rose 2.5% to $60.75 a barrel after OPEC's forecast for increased demand.

European markets fell 1%-1.7% with Germany leading the tally. Germany's benchmark 10-year Bunds soared over 10 basis points to about 0.72%, before dipping later in the session.

Greek Prime Minister Alexis Tsipras yesterday called on lenders to break an impasse in cash-for-reform talks. Earlier, Greece emptied an emergency IMF holding account to repay 750 million euros ($839 million) due to the international lender. The move avoided default but underscored the dire state of the country's finances.

AT HOME

Benchmark indices kept on moving southward after a lower start and finally ended with deep cuts of two and a third of a percent. Sensex nosedived 630 points to settle at 26877 while Nifty finished at 8127, down 198 points. BSE mid-cap and small-cap indices lost 1.7% each. All the BSE sectoral indices ended in red with Realty and Power indices leading the tally, plunging 3.3% and 3.1% respectively.

Dr Reddy posted 7.8% rise in fourth quarter net profit at Rs 519 cr. Total income rose 11.2% to Rs 3870 cr. The profit was below estimates mainly due to one-off forex loss of

Rs 84.3 cr in Venezuela. Consolidated operating margin fell to 15.8% from 16.8% y-o-y.

FIIs net sold stocks worth Rs 1330 cr but net bought index futures and stock futures worth Rs 178 cr and 1212 cr respectively. DIIs were net buyers to the tune of Rs 1332 cr.

Rupee depreciated 32 paise to end at 64.165/$.

Retail inflation as measured by Consumer price Index (CPI) for the month of April came in at 4.87% as against 5.25% in March and expected figure of 5.04%. The March IIP stood at 2.1% against 5% in February. 

The government yesterday decided to refer the Land Acquisition Bill to a 30-member joint committee. The GST Bill has been sent to a Select Committee.

OUTLOOK

Today morning Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 40 points higher opening for our market.

In yesterday's report we had mentioned that trading longs should be held with the stop loss of 8200.

The benchmark broke the 8200 support in the morning trade itself and plunged all the way to 8115 before closing at 8127.

A breach of 8115, the low made yesterday, would generate a fresh sell on the hourly chart and can take Nifty back to 7997 bottom made last week.

On the way up, one should wait for the crossover of 8327, the top made yesterday for taking fresh longs.

Lupin will report its quarterly earnings today.